VEEM Limited (ASX: VEE) has completed a $14 million placement to accelerate its defence expansion. Shares were issued at $1.30, representing a 13.6% discount to the last close. The issue comprised 10.8 million new shares, with settlement due on 7 October and allotment on 8 October.
The Miocevich family subscribed for $1 million, subject to shareholder approval, while major shareholder Perennial invested $2.7 million. Morgans Corporate, Blue Ocean Equities, and Euroz Hartleys acted as joint lead managers.
Balance sheet
Proceeds will be directed toward defence growth, working capital, and balance sheet support. Post-raise, VEEM expects a pro forma net debt of about $0.6 million as at 30 June 2025. The company has also historically received material upfront deposits on large defence contracts, which it anticipates continuing.
Northrop Grumman licence
VEEM signed a nine-year manufacturing licence agreement with Northrop Grumman, valued initially at up to US$33 million. The agreement enables VEEM to supply parts for the Virginia Class submarine program, a central element of the U.S. Navy’s undersea capability. The first request for quote is expected in the first half of FY26.
Northrop Grumman Australia executive Rob Denney said: “We’re excited to take the next step in integrating VEEM into Northrop Grumman’s global supply chain.”
Other defence contracts
VEEM achieved Level 1 accreditation with Huntington Ingalls’ Newport News Shipbuilding and has already received its first request for quote. The company also holds a $65 million, six-year contract with ASC, with revenue acceleration expected in 2HFY26.
Demonstrator blades for BAE Systems’ Hunter Class Frigate Program are in final development under a $1.7 million contract. Confirmation would position VEEM as one of only two qualified global suppliers for this program.
Managing director Mark Miocevich said: “We have successfully re-positioned VEEM as a high-quality defence contractor… This announced raise will enable us to capitalise on these developments in the short term.”
